If investing were frilly and pink, would women be more inclined to do it?
Over on the Harvard Business Review website, investor and frequent contributor Whitney Johnson tried to puzzle through why women are so nervous about putting their money in the market, despite the fact that a majority of women are breadwinners. Just take this stat from USA Today: 42% of women say they are "very uncomfortable" taking on investment risk, compared with 28% of men.
I suspect because, deep down, they fear it will bankrupt their femininity.
The feminist website Jezebel, naturally, was not impressed with her condescending idea that women care more about conforming to a 1950s ideal than making returns on their savings, calling it a "pseudo psycho-analytic explanation." They went on to say, "then again maybe women are just way more honest about how distressing big financial decisions can be."
This seems like a more accurate explanation, especially since women's natural tendency against taking an unreasonable risks can actually make them better investors. While men are more likely to see investing as a competition, women see it as a way to eventually buy a house or take care of their families.
The comments from women on Johnson's own blog back this up:
"I have tended to shy away from investing in anything more "complex" than an indexed 401(k). I've adopted this mindset because I'm quite risk averse, and, frankly, I assumed that my future husband would handle my (our) investments."
On Jezebel, a commenter said, "what I have learned of the world of finance mostly makes it look like glorified gambling."
Other explanations (which are backed up in the comments as well) could be:
- Girls are taught (consciously or not) that investing is an intimidating, dog-eat-dog activity best pursued by testosterone-fueled traders spoiling for a fight
- Because women on average earn less than men, they have less to invest
Clearly, there is nothing holding women back from investing beyond some misconceptions. No, you don't have to be a math whiz or be rich to get started. You just need to learn the ropes. (Find out when to invest and what you need to do it.)
If you feel intimidated by investing--whether you're a man or woman--you can start with the Retiring in Style Bootcamp to get your 401(k) or IRA situation up to snuff (because saving for retirement is one kind of investing). Then you can move on to the Start Investing Bootcamp. Both are free, and both should banish your insecurities.